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Purchase contract for business

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JoniCaryl

Guest
What is the name of your state? California. I have been considering buying an existing business. I signed a document agreeing to assume the outstanding business loan, which is being carried by the previous owner, from the current owner. Can I void this contract? Do I have any legal recourse since I have not received an inventory list, business tax returns or business bank statements from the current owners. :(
 


Dandy Don

Senior Member
Of course you can void it, but you would be wise to consult a business law attorney. Is the document you signed just relating to the assumption of the debt only or does it have to do with the entire purchase of the business? If it turns out that you can't void the contract, get it amended to include a clause about full disclosure of the documents you want and penalties if they don't provide them.
 
C

chrissie

Guest
JoniCaryl said:
I have been considering buying an existing business. I signed a document agreeing to assume the outstanding business loan
Did I read that right? You've already signed an agreement to assume an outstanding business loan, but you're just CONSIDERING buying the business? You haven't signed a purchase agreement yet? That doesn't make sense.

If you're saying that you already signed an agreement to purchase the business and the terms included your assumption of the debt, then I ask you: Did the terms include full disclosure/due diligence on the part of the seller? If it did, and they did not comply, it sounds like a breach of agreement to me. If they did comply and you already paid something (consideration to bind the agreement) and you back out, then you could be in breach.

I highly recommend you consult an attorney. Also, depending on the type of business, you may want to look into doing an Asset Purchase Agreement (as opposed to a full business acquisition, with its existing debts, warts and all). A good attorney can help you with this.
 

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